What Recent Volatility and Growth Forecasts Mean for HubSpot Stock in 2025

If you are wondering what to do with HubSpot stock right now, you are in good company. Investors have been on a wild ride lately, with the stock climbing 4.4% over the past week, yet still sitting nearly 33% lower year-to-date. That kind of volatility can stir up lots of questions, especially when you realize that just in the last five years, HubSpot has delivered returns over 56%. Clearly, the story here is more complex than a single quarter or market shift.

Part of that story comes down to how investors view both the risks and future opportunities in software businesses like HubSpot. The wider tech sector has felt some turbulence as the market reassesses growth prospects amid shifting macroeconomic signals. This likely explains some of HubSpot’s recent ups and downs. Even with this backdrop, a deeper dive into valuation tells an interesting tale. HubSpot scores a 5 out of 6 on our undervaluation checks, which is a strong signal that the stock might be more attractively priced than headline numbers suggest.

So how do we get to that number, and what does it mean for anyone weighing an investment? In the next section, we will break down the most common valuation methods investors and analysts use to assess companies like HubSpot. In addition, we will share an even smarter way to judge whether this stock is really undervalued, one that goes beyond the standard metrics and gives you an edge in your decision-making.

Why HubSpot is lagging behind its peers

Approach 1: HubSpot Cash Flows

The Discounted Cash Flow (DCF) model is a popular tool that investors use to estimate a company's true worth. Put simply, it projects HubSpot’s future cash flows and then discounts them back to today’s value. This process provides a more grounded view of what the business is worth at present.

Looking at HubSpot’s numbers, the company’s latest reported Free Cash Flow is $533.7 million. Analysts project significant growth ahead, with Free Cash Flow expected to reach about $1.90 billion by 2029. While forecasts from analysts cover only five years, additional increases after that are extrapolated from existing trends. This offers a ten-year growth outlook for the stock.

Based on these projections and the application of the DCF model, HubSpot’s estimated intrinsic value is $791.92 per share. This figure is notably higher than the current trading price and represents a 40.9% undervaluation according to this calculation.

If you are looking for a straightforward assessment, this DCF analysis indicates that HubSpot shares appear attractively priced at the moment.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for HubSpot.

Our DCF analysis suggests HubSpot is undervalued by 40.9%. Track this in your watchlist or portfolio, or discover more undervalued stocks based on DCF analysis.

Approach 2: HubSpot Price vs Sales

Another widely used way to value technology companies like HubSpot is the Price-to-Sales (P/S) ratio. This metric is especially useful for high-growth businesses in software, where earnings may be less stable or even negative as companies invest heavily to expand. Because it connects a company’s market value directly to the revenues it generates, the P/S ratio is a practical tool for investors focusing on future growth potential rather than just current profits.

HubSpot currently trades at a P/S ratio of 8.66x. For context, the average P/S ratio across the Software industry is 5.10x, while HubSpot’s listed peers have an average of 11.57x. On the surface, HubSpot sits below its peer group but remains significantly above the broader industry average, highlighting investor optimism about its future prospects and recent growth trends.

Simply Wall St’s proprietary “Fair Ratio” takes this analysis a step further. The Fair Ratio for HubSpot is 11.89x, which synthesizes several factors, including projected revenue growth, risks unique to HubSpot, healthy profit margins, industry classification, and overall company size. This approach is more robust than basic peer or industry comparisons because it accounts for the specific opportunities and challenges that shape a company’s fair market multiple.

Comparing HubSpot’s current P/S ratio (8.66x) to its Fair Ratio (11.89x), the stock appears to be undervalued by this measure, as investors are paying less than what would be expected based on the company’s fundamental outlook and risks.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your HubSpot Narrative

Earlier, we mentioned there's an even better way to understand valuation. Let's introduce you to Narratives. In simple terms, a Narrative is your story and perspective about a company, layered behind the numbers—your views on HubSpot's future revenue, margins, and what you think the business is really worth. Narratives connect the way you see a company's future to a financial forecast, which then maps directly to your own fair value for the stock.

This approach is easy and accessible. On Simply Wall St's Community page, investors worldwide create and share their Narratives. Narratives help you decide whether it's a good time to buy or sell by directly comparing your Fair Value with HubSpot's current price. They update automatically as new information or earnings are released, so your view is always relevant.

For example, one HubSpot Narrative expects aggressive growth and strong international expansion, targeting a fair value over $900 per share. Another sees rising competition and uncertain monetization, believing a fair value closer to $593 is more realistic. The beauty of Narratives is that they reflect your own assumptions, letting you track how your expectations and the market story evolve over time. This can help you make more informed investment decisions, rather than just following the crowd.

Do you think there's more to the story for HubSpot? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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